Foreign Corporation's Substantial Contacts In The United States Did Not Support Specific Jurisdiction Because They Ceased Before And Were Not Related To The Sale Of The Debtor, Which Was The Basis Of The Cause Of Action
GCIU -- Employer Retirement Fund v. The Goldfarb Corporation (May 11, 2009)
The Goldfarb Corporation, a Canadian company, does not maintain a place of business or employees inside the United States. In 1995, Goldfarb purchased 60% of Fleming Packaging Corporation, a Delaware corporation. Between 1995 and 2003, Goldfarb was actively involved in the financial affairs of Fleming but did not directly control its activities. Members of the Goldfarb family were on the Fleming board and were corporate officers. In February of 2003, the Goldfarbs and Bank One negotiated an amendment to a loan agreement, pursuant to which the lenders agreed to a delay in exercising their rights of default and the Goldfarb agreed to relinquish control of the company (which they did). One of the reasons for the amendment was to allow Fleming to complete a sale of its operations as a going concern. Fleming filed for bankruptcy in May of 2003. Plaintiff, a multi-employer pension plan, filed an action in 2007 to collect Fleming’s withdrawal liability payments from Goldfarb. The district court dismissed the action, concluding that Goldfarb had insufficient contacts with the United States to sustain jurisdiction. The court also denied a request for further discovery. Plaintiff appeals.
In their opinion, Judges Bauer, Flaum and Kapala affirmed. The Court addressed the requirements for specific jurisdiction (plaintiff did not challenge the absence of general jurisdiction). The specific jurisdiction analysis consists of three steps: a) identify the contacts, b) determine whether the minimum constitutional threshold is met, and c) determine whether the contacts are related to the cause of action. The sole issue before the Court was whether Goldfarb's contacts in the United States were related to the plaintiff's cause of action. The Court examined Goldfarb's involvement with Fleming's lenders as they compared to the elements of plaintiff's cause of action. Fleming's withdrawal liability arose out of its withdrawal from the fund. The liability exists because of the nature of the sale of the business and its failure to comply with ERISA’s “safe harbor” provisions. All of Goldfarb's contacts occurred prior to February of 2003, when it surrendered all of its interest in Fleming. The Court found that these contacts were too attenuated to support specific jurisdiction. Finally, the Court concluded that the district court did not abuse its discretion in refusing to allow further discovery.
ReMapp International Corp. ("ReMapp") and Comfort Keyboard Co. ("Comfort") had done business together for several years. ReMapp provided electronic materials, including circuit boards. In 2006, the parties engaged in oral and written communications regarding the purchase of several thousand circuit boards and several thousand microprocessors. When Comfort did not pay for the material, ReMapp brought a breach of contract action. At a bench trial, the court awarded damages for Comfort's failure to pay for the circuit boards. Although the court also found that Comfort had breached the contract with respect to the microprocessors, the court also found that ReMapp had not mitigated its damages and so awarded no damages. Comfort appeals.